Taxations without Transparency

Bali Daily (The Jakarta Post) reports that leaders of Bali’s tourism industry are calling for greater transparency in how the revenues and taxes generated by the Island’s main "cash cow" of travel are handled.

Bagus Sudibya of the Indonesian Tourism Industry Association (GIPI), speaking at a tourism gathering in Bali, said: “Every year, tourism contributes so much money to the governments, both provincial and regional, and even the central government. But they have never informed us what kind of funding allocation is supported by tourism revenue.”

Speaking on behalf of the tourism industry, Sudibya called for more money to be spent on the improvement of facilities, human resource development and infrastructure improvement.

Badung, the southernmost regency in Bali, produced US$125.5 million in tax revenues from tourism in 2012. “Badung, the richest regency in Bali, is also able to support other regencies in developing their tourism and improving facilities,” Sudibya explained, arguing for a more equitable distribution of benefits from tourism to other areas of Bali.

Hoping for a dialogue on the fair distribution of taxes collected from Bali tourism, Sudibya added: “It is very important to openly discuss the taxes as we (the tourist industry) are the ones who generate the revenue. I think we have the right to know the flow of funds in order to distribute these benefits to Bali and its people, especially those who work in this sector.”

Continuing on the need for better promotion of Bali tourism, Sudibya said: “Bali is now facing fierce competition from neighboring countries. We have to launch integrated and effective promotional and marketing activities if we want to compete successfully in the international tourism scene.”

At the same gathering, Sang Putu Sebaya, chairman of the Bali chapter Association of Indonesian Tour Guides’ (HPI-Bali) suggested funds also need to be spent on upgrading the quality of local tour guides. “The association has frequently held upgrading courses with funding collected from the membership fees,” Sebaya explained.

Complaining that the government does not provide training funds to HPI-Bali, he added: “At least, we can get funding to help our members obtain the relevant certification.” The head of an association with 10,000 members continued: “Only 1,500 guides have passed the competency tests. The remaining members have to wait for financial reasons.”

There is the added pressure to enhance the competency of Bali’s HPI members in order that they are able to compete with foreign tour guides from the ASEAN region who will be allowed to operate freely in Bal beginning in 2015 under the terms of the ASEAN Free Trade Agreement (AFTA).

A lecture on tourism from Bali’s Udayana University, I Nyoman Sunarta, joined those at the meeting calling for a more equitable distribution of tourism revenues to upgrade the welfare of the Balinese. Sunarta said: “Additionally, the money must also be used to rectify the environmental damage caused by tourism activities.” The respected academic pointed our that Bali’s tourism prosperity was based on culture, nature and its people and it therefore only made sense for money to be reinvested to preserve and protect the island’s heritage, saying, “The percentage of funding allocated for cultural and natural preservation should be bigger than for other activities.”

Sounding a warning and citing one example, Sunarta complained how salt-water intrusion has become a major problem in Bali, leaving some are unable to support crops, adding: “The level of the land in Kuta could drop significantly and affect the condition of buildings there. But the Badung administration has not done anything to deal with this problem.”